Objective Modes of governance were compared in ten local mental health networks in diverse contexts (rural/urban and regionalized/non-regionalized) to clarify the governance processes that foster inter-organizational collaboration and the conditions that support them. Methods Case studies of ten local mental health networks were developed using qualitative methods of document review, semi-structured interviews and focus groups that incorporated provincial policy, network and organizational levels of analysis. Results Mental health networks adopted either a corporate structure, mutual adjustment or an alliance governance model. A corporate structure supported by regionalization offered the most direct means for local governance to attain inter-organizational collaboration. The likelihood that networks with an alliance model developed coordination processes depended on the presence of the following conditions: a moderate number of organizations, goal consensus and trust among the organizations, and network-level competencies. In the small and mid-sized urban networks where these conditions were met their alliance realized the inter-organizational collaboration sought. In the large urban and rural networks where these conditions were not met, externally brokered forms of network governance were required to support alliance based models. Discussion In metropolitan and rural networks with such shared forms of network governance as an alliance or voluntary mutual adjustment, external mediation by a regional or provincial authority was an important lever to foster inter-organizational collaboration.